LONDON (Reuters) - Private equity firm TPG has been dropped from the auction for a majority stake in British grocer Iceland Foods because its bid was too low, a person close to the process said on Monday.
Other bidders -- private equity firms Bain and BC Partners, as well as grocer Asda (WMT.N) and Wm Morrison (MRW.L) -- are through to a second round of bidding, with offers expected in around the end of January, the person said.
Failed Icelandic banks Landsbanki and Glitnir are selling a combined 77 percent stake in Iceland Foods and hoping to achieve a price that values the whole business at 1.5 billion pounds ($2.36 billion) or more.
Founder and chief executive Malcom Walker, who together with other managers owns the remaining 23 percent stake, is also working on a bid.
Under a shareholder agreement, he will win the auction if he matches the highest bid. TPG declined to comment.
($1 = 0.6366 British pounds)
Reporting by Mark Potter; Editing by Jon Loades-Carter